Improving the training of young workers should be seen as the key to narrowing the gap between rich and poor, the Chief Executive has been told.
Tung Chee-hwa, who will deliver his fourth Policy Address on Wednesday, was also told to offer more assistance to small and medium-sized firms.
Economics Professor Frances Lui Ting-ming, of the University of Science and Technology, called for a greater emphasis on retraining young workers. The professor, also the director of the university's centre for economic development, said: "It is not cost-effective to pour in resources to train those over 50. We have too many low-skilled workers who cannot meet the demands of the new economy."
Professor Lui proposed setting up an official credit-rating scheme for small and medium-sized firms to help them get bank loans.
Professor Nelson Chow Wing-sun, of the University of Hong Kong, agreed the Government should step up retraining. He said there was little else it could do to narrow the wealth gap.
Mr Tung denies Hong Kong has a problem with extreme poverty, and believes boosting productivity will help low earners.
In a prelude to his Policy Address, Mr Tung said on Friday during an interview with RTHK that he had no plans to increase welfare payments. The problems for low-earners stemmed from the fact that the benefits of the economic recovery had yet to trickle down.
The SAR's gross domestic product grew 14.3 per cent and 10.8 per cent respectively in the first two quarters of this year. Financial Secretary Donald Tsang Yam-kuen, who introduced an $8.5 billion tax rebate in last year's Budget to boost consumer spending and corporate liquidity, has forecast an 8.5 per cent growth rate this year.
But in the dotcom era, low-tech jobs bring less reward and officials admit unskilled and older workers have not benefited greatly from the recovery.
Not all are convinced retraining is the solution. A movement called Livelihood 21, initiated by about 20 welfare and religious groups, has urged Mr Tung to provide housing for the poor, introduce a minimum wage and create more jobs.
A senior project officer at the Hong Kong Council of Social Service's policy department, Chua Hoi-wai, said his council's 1996 research showed 300,000 people were living in abject poverty. "Retraining is of course important. But we should not just sit back and do nothing for the group of people who opt to work in low-paid jobs rather than apply for public assistance," said Mr Chua. He suggested encouraging more workers to study part-time.
Director of the Society for Community Organisation Ho Hei-wah said the Government should boost welfare services.